Untidy Shop said:
[size=13pt]Warren, you seem to be hinting at some form of retail price maintenance which few customers are rejoicing about down here since it was introduced in April this year following an exemption given to Festool Aust. It too was designed to ensure some dealer equity. Funny the bad dealers still give crap service, the great dealers are still great. All we the customers have got is more competitions, but no dealer discounts and certainly no further quarterly specials from Festool.
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[member=8822]toolfest.co.uk[/member]
Warren, I understand if you feel for a number of reasons that you can not respond to this.
Nothing like that is in the offing, don't worry. I'm sure there will be plenty of competition in the UK market with dealers always free to sell at the price they choose, whether it be high, low or even below cost, it will be up to the dealer to sell the products he has purchased from Festool for any price he/she likes.
However, consider this ficticious scenario: A dealer has say half a million pounds available, either cash or borrowed. That dealer could purchase large quantities of tools at a better rate, a lower price, a bigger discount on every product in the price list. Another dealer has five thousand pounds available, either cash or borrowed and could probably buy two or three products at a better rate, a lower price, a bigger discount. The first dealer can then sell all but two or three products he bought at a lower rate than the smaller dealer can buy from the manufacturer, therefore dominating the marketplace and pushing other dealers out of the market. It is totally fair for this to happen and the smaller dealer doesn't complain, he just wishes he had more money in the first place. [smile] The manufacturer benefits from huge sales growth as the dominating dealers sell their products for less and become more competitive in the marketplace. So the manufacturer is happy, the big dealer is happy and the end users get a bargain.
Where does this lead though, I can only guess. Fewer dealers probably, and most disillusioned? Less exposure in retail environments as the product is perceived by dealers as non-profit? Fewer end users see the product in their local stores and things start to stagnate.
But this is all wrong surely? We want a well stocked dealer in every major town, enthusiastic about the brand and being rewarded with a reasonable profit for their efforts. It grows the customer base, results in a happy manufacturer, dealer and end-user with machine accessories and consumables readily available and within easy reach.
How to achieve it is the tricky bit. I don't know if the new changes are designed to do this but if all the dealers buy at the same price regardless of quantity then maybe just maybe some of the dealers who are thinking of moving the brand towards the exit will wait and see if the product becomes more attractive to sell. I hope so, the brand is awesome and wide and deep market penetration is still a long way off, and I think having one or two dominant dealers will stall progress in the UK.
Right, I'm getting giddy up here on my soapbox. [big grin]
Best regards
Warren
